A bidding war has erupted for control of property group Australand, after a surprise cash offer was made this morning by the Singapore-based Frasers Centrepoint Ltd.

The offer, which counters the one on the table from Stockland, is to acquire 100 per cent of Australand' through an off-market takeover offer for cash consideration of $4.48 per Australand share, but it moves to an equivalent $4.60, as it includes the Australand interim distribution of 12.75 cents.That equates to a $2.59 billion cash offer, trumping Stockland's share-swap deal.

Investors appear to think that a higher price could be in the wings for Australand, with the shares trading at around $4.56 today.

In response to the new offer, Stockland directors said they ''note the announcement by Australand this morning regarding a conditional cash proposal from Frasers Centrepoint Limited to acquire Australand Property Group''.

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''The Stockland Board will consider its options and provide an update in due course,'' the Stockland statement said.

Singapore-based analysts at Goldman Sachs said Frasers used to be controlled by Temasek/OCBC family but now controlled by Thai Bev.

''They are well funded and seem to have a decent amount of cash they are trying to put to work outside of Thailand. They have been very aggressive in bidding for some mixed use commercial/residential in Singapore recently,'' the analysts said.

A week ago, Stockland upped the pressure on rival Australand after it improved its $2.5 billion offer with a higher share value and also included an alternative cash component.

If approved, it will create one of the biggest residential development company in the country, and also unleash a number of office towers in Sydney and Melbourne, at a time when appetite is high from overseas buyers.

Stockland has said the combined group would also boot its presence in the industrial and business park sector, which is benefitting from the booming internet sector, where goods bought online must be stored and then distributed.

In some cases, the land under the warehouse could also be rezoned for housing and master-planned communities.

Investors had been angling for a new offer, that will now see a full scrip offer of 1.124 Stockland securities for every Australand security, giving it an implied price of $4.35 per Australand security.

As an alternative, Stockland has offered a reduced scrip ratio, together with a cash component up to an aggregate of $250 million, with the structure to be agreed with the Australand Board.

In response, the Australand board said it would make an announcement on the deal, ''in due course''.

Brokers from Moelis & Co said they viewed the revised offer as both full and fair and expect the Australand board to support it in the absence of a superior offer.